Money is a tool. You are the driver.

"Money is a tool. It will take you wherever you wish, but it will not replace you as the driver." --Ayn Rand

I love the quote above because it illustrates three very important points:

  1. Money is a tool

    One of the most common reasons people give for not investing is, “I don’t have the money.”

    This illustrates a common misconception many people have that money makes money. This is not true. People make money. Wise investors use money as a tool -- it can be their money or someone else’s money -- to invest and generate returns on the money invested. Unfortunately, as many people have experienced, simply having money to invest and investing it often leads to loss of the money. To be a successful investor you need to be educated about your investments and take control of your investing. This leads us into point number two…

  2. It will not replace you as the driver

    I see it again and again on talk shows with financial “experts”: a person from the audience asks, “I have X dollars saved up. What should I invest it in?”

    This question shows that this person thinks she is not capable of making her own investment decisions. Certainly, financial experts don’t mind you thinking this since you then turn your money over to them to manage… and they get paid their fees whether your investment makes money or not. The problem here is that you’re turning your financial future over to someone else. To use the car metaphor, if you want to control where the car goes, you have to drive it. If you let someone else drive then you end up wherever they take you, and you may or may not like where they take you. Why take the risk? Drive yourself.

  3. It will take you wherever you wish

    When you use money as a tool, instead of becoming a slave to money, your dreams really can come true. Learning how to use money effectively is a process and you’ll make some mistakes along the way, but once you’ve mastered the skill of using money you’ll find it can take you wherever you wish.

Original publish date: August 06, 2009